Q: Why did Amazon.com's stock rise even though it reported sharply lower earnings?

A: In a normal world, if a company reported a decline in profit the stock price would fall. But Wall Street is far from a normal world.

Stocks, in the short-term, can do things that seem perplexing. And the way Amazon.com's (AMZN) stock reacted to the retailer's 45% decline in net income in the fourth quarter is a great example.

Amazon reported a net profit of $97 million during the quarter, which is down from the $177 million it earned in the same quarter the prior. The resulting 21 cents a share profit even fell short of the 29 cents a share analysts were forecasting. Despite that announcement on Jan. 29, though, the stock soared 5% on the first day of trading after the results were released.

The stock's positive reception to the seemingly bad news tells investors about how Wall Street works. There are times when investors aren't as concerned with the official bottom line, but another more obscure indicator. And with Amazon, in the fourth quarter, investors were more interested in revenue growth and the profit margin in North America. Revenue during the quarter rose 22% to $21.3 billion.

There's no question that for most companies, the profit and how it measures up against forecasts is a big mover of the stock in the short term. But with companies viewed as fast-growing, investors will often look past declining profit and even losses if they think the company is well positioned for the future.